Broadly speaking, the big stories in inflation over the past year: 1) Shelter disinflation proceeded so favorably last year that it is now running *below* core non-housing services (unusual) and also below the pre-pandemic run rate. Shelter dis-inflation was widely expected in 2023, after new lease rents inflected much lower in late 2022. But it took a bit longer to show up, fraying nerves in early 2024. 2) Core goods inflation picked up in 2025 and showed no signs of slowing in January 2026. Those prices rose at an annualized rate of 3% over the three months ended January. Core goods was around zero before the pandemic. Excluding the 2021-23 surge in core goods prices, core goods inflation accelerated last year to levels not previously experienced since the early 1990s. 3) Core non-housing services inflation is moving sideways at around 3.5% YoY. It averaged 2% during the five years before the pandemic. It doesn't have to fall quite that low for the Fed to hit 2% because inflation was below 2% before the pandemic, and it doesn't have to fall that low if we get even more shelter disinflation this year, which seems possible. But the overshoot relative to the pre-pandemic equilibrium in core goods *and* core non-housing services remains a challenge for returning to 2% inflation. One or both of these will have to get better.(Nick Timiraos)